APOLLO FOOD HOLDINGS - Memories Of Our Childhood

Do you still remember the snacks above? I used to eat lots of these snacks since I was a 4-year-old child. They were so crispy & tasty, yummy... Even now, sometimes I still could not resist to have them when I see them in mini market, lol...

Anyway, I am not here to promote these snacks, but to talk about the company which make them, Apollo Food Holdings. APOLLO is 1 of the most attractive company among the consumer industry in terms of PE and dividend yield. APOLLO is trading at 12x of historical PE compare to most of its peers of over 16x. Dividend yield wise, APOLLO paid out quite pleasant dividend of RM0.20  per share last December, equivalent to 6.1% of yield to its current price.

APOLLO's business is divided into 2 segments: local market & export market, i.e. India & China. Foreign business is important to APOLLO because their export business counts for almost 50% of their total revenue recently, with the revenue growth of 15% for the past 2 years. Besides, the profit margin of 20% for foreign market is higher compare with local market which is about 5%. I see their export business will be their main focus to generate more income for the next few years.

On the other hand, the balance sheet of APOLLO is pretty strong, with net cash of RM56.59 million, which is equivalent to RM0.70 per share, without any outstanding borrowing. 

I think APOLLO is going to announce the dividend payment in the near term. Refer back to their payout history & their cash position, it should not be less than RM0.20 per share. Due to the rise of consumer stocks, M&A activities between F&B companies recently, and good dividend payout, I believe the stock price is still undervalued. Should the company be able to achieve RM0.35 earnings per share next year, I see  the price will be worth RM3.50 & above. Anyway, the liquidity of APOLLO is low, this is due to its low balance float of 17.8%.

Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

IGB REIT - The Next REIT Giant In The Making

How many times on average do you visit Mid Valley or The Gardens per month? If you do often visit Mid Valley & think that Mid Valley is hot and always full of crowd, well, now you have the option to enjoy their income directly by subscribing IGB REIT units. Anyway, don't think that Mid Valley will give you any shopping voucher if you hold their REIT units. ^_^

IGB REIT is a retail property REIT, its portfolio comprises of Mid Valley Megamall and The Gardens Mall. With market cap of RM4.25 billion, IGB REIT will become the largest REIT in Malaysia upon listing. Just like other REITs in the market, IGB REIT is a dividend yield player, which will generate 5.15 - 5.5% of dividend per annual if you subscribe their units at IPO price of RM1.25.

Well, I think the IPO price is not impressive, however, reasonable. Let's compare IGB REIT with Pavilion REIT. The IGB REIT IPO is selling at premium in term of book value. IGB price is about 1.25 time of its book value of RM0.996 compare with PAV REIT IPO of 0.936 time. Dividend yield wise, IGB REIT offers lower dividend yield of 5.15 - 5.5% compare with PAV REIT of 6.5% at IPO price.

Anyway, I still see some upsides for IGB REIT price. Well, 5.15 - 5.5% of distribution income is still higher compare to FD rate & current yield of its peers PAV REIT & CMMT which generating around 4.7% & 4.9% of  dividend respectively. On the other hand, P/BV (price per book value) of IGB REIT is around 1.25x which is lower compare with PAV REIT & CMMT around 1.41x & 1.42x respectively.

All in all, I see IGB REIT trades at target price range of 1.40 -1.45 in the short term after listing. It's still worth to be subscribed to have some capital gain as well as dividend payments. For REIT, I prefer AmFirst, Atrium, & Tower REIT, which generating 8.3%, 6.9% & 7.5% yield respectively.



Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.

CYPARK - Building The Better Future

Cypark Resources Berhad (CYPARK) is 1 the of big players of environmental remediation and renewable energy in Malaysia. They had announced its 2nd quarter result end of April 2012. The revenue for 1H increased to 85.87 mil compare to 83.28 mil last year, while the net profit increased by 10.43% to 14.11 mil compare to 12.77 mil last year, mainly because of better cost control and the start of contribution from renewable energy. Renewable energy segment has generated RM 935,876 of revenue to the company, and is expected to generate more income to the company in the upcoming quarters since the solar plant is just launched in March 2012.

CYPARK has no major issue in securing more projects for their environmental remediation business as they have good reputation in the industry and there are no strong competitors in Malaysia. While the environmental engineering and the landscaping & infrastructure segments are the main contributors to the company's income, however, the most interesting part of CYPARK is actually came from its renewable energy business. Currently CYPARK has the largest integrated renewable energy plant of the Southeast Asia, which including solar and biogas power generations, in Pajam, Negeri Sembilan. The current capacity of the power plant is around 8 MW of power generated by the solar plant, the management aims 25 MW at the end of this year and expects the capacity will achieve 60 MW of power at the end of FY13.

Cypark's solar farm - Image by The Edge Malaysia

Why renewable energy? It is because the promotion on green electricity is encouraging at the moment in Malaysia. Revenue is secured by Power Purchase Agreement (PPA) - CYPARK has inked 2 long-term contract with Tenaga - 21-year 8 MW solar PPA (worth RM 11 mil)  and 16-year 2 MW biogas PPA. Besides,  renewable energy might be a good option to substitute the current power-generating materials, i.e. coal, fuel, natural gas, etc. and more environmental friendly - lower carbon emission compare to coal and fuel.

Anyway, there are concerns that may take into consideration: Renewable energy is costly compare to current energy sources while Malaysians are still enjoying one of the lowest electric tariff in the region. Besides that, the efficiency of turning solar energy into electricity is still very low, which is just about 20% - 30%. And, the supply of solar energy might be affected by monsoon seasons in Malaysia, which is, there will be no sunlight if the rainfall is heavy, especially during the year end.

Currently CYPARK is trading at historical P/E of around 12x. All in all, I believe that their earnings will grow 10% in FY12 compare to FY11 mainly of higher profit margin, stable earnings from environmental remediation and the upcoming contribution from renewable energy division.

From technical charting, CYPARK closes above the support level of 1.70. A downward-trend triangle is formed and the selling pressure is testing the support line of 1.70. Should CYPARK close below 1.70, the immediate strong support is expected to be 1.64 and 1.55. The chart would only show upward trend if the price violates and closes above 1.84 & the resistance will be 1.98. Anyway, look for it to trade sideways between 1.70-1.84 in short term.

Note: The above content is just a blogging activity that purely share my investment thoughts & ideas and should not be used as recommendation to buy or sell any securities. I may already have position in the above securities. Any action that you take from the opinions or information of this blog is solely on your own responsibility. Please consult your investment advisor before you make any investment decision.